October 15th, 2013

Getting even cozier with Portland: San Francisco based startup Cozy lands $5 million and doubles down (triples, actually) on PDX office

If I’ve said it once, I’ve said it a thousand times: Portland is the de facto hub of regional offices. Not necessarily in quantity, but definitely in quality. Intel, Jive, Mozilla, New Relic, ebay, Salesforce… the list goes on and on. And it sounds like Cozy is gunning to be on that list, as well.

We’ve raised a $5 million Series A round from General Catalyst Partners with continued participation from the Social+Capital Partnership. In addition to Ted Maidenberg and the amazing team at Social+Capital, Neil Sequeira from General Catalyst has joined our Board of Directors. We’re stoked to join the General Catalyst family, and are now part of a portfolio that includes Airbnb, Warby Parker, Elemental, Stripe and Kayak among other great companies. Those are some good sisters and brothers!

Founded in San Francisco last year, the company opened a Portland office in February because Cozy found it easier to hire software engineers in Oregon. Chief executive Gino Zahnd and chief technology officer John Bragg subsequently moved to Portland, too.

Cozy cofounder and CEO Gino Zahnd was kind enough to answer a few questions about the company and their experience with Portland.

Silicon Florist: Any pleasant surprises about Portland?

The biggest surprise is that per capita, Portland is our number one city for Cozy landlords, and Portland continues to be one of our top five metros in raw numbers. The high competition for rentals here is quite similar to what we’re seeing in the traditionally competitive markets like San Francisco and NYC. It makes for a tough time finding a place here, but it’s a great time to be Cozy (or a Cozy landlord) in Portland. Portland’s independent spirit actually plays well with what Cozy enable people to do.

The density map below shows around 700 zip codes where Cozy is being used. We’re being used in every single urban area, every suburb, and many college towns and even rural areas.

And here’s Portland. We’re fairly well covered in this area!

SF: Sounds like the Portland office is successfully growing. Do you see that trend continuing?

Cozy’s Portland office is currently almost three times as big as our San Francisco office. I actually just moved to Portland full-time(ish) as well, so both Cozy founders now call Portland home.

Since opening our Portland office last February, we’ve been constantly impressed with Portland’s tech and design community. Whether it’s meetups, associations, founders/execs from other companies, or potential employees, there’s an excitement here that is very unique to this city. It’s infectious, and it has us stoked on Portland.

We’ve also seen an interesting pattern with hiring. Several of our recent hires have come from other states, and when given the choice, 100% of them are choosing Portland over San Francisco. I’m not certain why, but I’m guessing a simple cost of living calculator makes that choice an easy one. The median single family home in San Francisco is $1,000,000.

To be clear, we’ll continue to operate in San Francisco. We have an amazing team there, and I’ve been spending half my time there over the past year. Strategically for us, San Francisco is still a great place to be. We’re in two of the best cities in America, and we feel lucky about that.

SF: What’s most surprised you about the way customers are using Cozy? Or maybe the types of customers who’ve been attracted to the platform?

The most interesting thing we’ve seen is that we have had literally zero people leave the product once they accept a rent payment. Zero percent churn is somewhat unheard of. The fact that we give both landlords and renters a little bit of time back every month to do other things that aren’t related to paying or collecting rent is super sticky. For landlords, it feels great to wake up near the first of the month in your pajamas, and the rent’s just already in the bank no matter how many units or properties you have.

Another interesting use of the product is popping up in college towns. We have landlord customers who own a number of rental houses, and they’ll collect deposits early in the spring from students who don’t actually move in until the fall. We didn’t specifically design the product to do that, but it works perfectly in that regard. We have one customer in Minneapolis with 21 houses and 63 tenants. When school started in August and they all moved in, all the rent payments just started going automatically. Imagine how much time, money and energy we saved her.

SF: What’s next for Cozy?

We’re going to see some huge product releases in the next six months. We’ve been working for 16 months with one credit bureaus to completely turn credit reporting on its head, and give privacy and control to renters for the first time ever—no more handing your SSN to a stranger. We’re also ending application fees. We’re going to allow renters to pay rent without their landlords using Cozy. Mobile web and native apps are coming. And of course, there will be many new features related to payments and continued improvements to what we’ve already built.

SF: Just out of curiosity, how do your investors respond to your Portland presence?

I’m fairly convinced we have the best investment team in the world. When we started the A raise, we were very clear that we’d continue growing our Portland presence because Portland has been so good to us. When we met Neil at General Catalyst—aside from his general excitement about Cozy—he was doubly excited about Portland because we’re his second investment here. Elemental (Sam Blackman, CEO) is also based here, and part of the General Catalyst portfolio. We’re in good company with General Catalyst and the Social+Capital Partnership—Airbnb, Kayak, Stripe, Warby Parker, and Elemental are all part of the family.

We’re in a good place marketwise and geographically. It’s an exciting time for Cozy!